Temperature‐depth profiles, measured in boreholes, contain a temporal record of past changes in surface ground temperature and provide valuable constraints on climatic variations over the last few centuries. However, the linkage between ground temperature and meteorological variables including air temperature is imperfectly known. To understand that linkage better and to document in detail how the surface ground temperature changes propagate into the subsurface where they are later measured in temperature‐depth logs in boreholes, we have designed and installed a geothermal climate change observatory. Installed in arid northwest Utah, our Emigrant Pass Observatory (EPO) consists of an array of thermistor strings in the subsurface and a meteorological station at the borehole collar. Results from our first complete annual cycle, November 1, 1993, though October 31, 1994, are presented. Ground and air temperatures generally track each other but with important time‐varying offsets. The mean surface ground temperatures for the period are 11.3°C on the granite outcrop and 9.5°C for the partially shaded regolith site; mean air temperature at a 2‐m mast height above the ground is 8.8°C. The ground‐air temperature differences are variable on timescales from days to seasons, largely governed by level of absorbed solar radiation. Marginal precipitation (8.6 mm) and ephemeral snow cover did not significantly disturb the ground‐air temperature difference during the year monitored. Instrumental measurement of air temperature has nonrandom sampling biases that present problems for observing long term changes. The calculation of average annual air temperature at EPO decreases by 0.34 K as the sampling rate of air temperature is decreased from 60 s to every 12 hours. The attenuation and phase lag of thermal waves with depth confirm that heat conduction theory adequately describes the transient temperature field at this site, and yield in situ estimates of thermal diffusivity, a quantity needed to reconstruct surface ground temperature histories. Thermal diffusivity for the granite and regolith is 0.88 × 10−6 m2 s−1 and 0.45 × 10−6 m2 s−1, respectively. Energy flux calculations for the Emigrant Pass Observatory site suggest that a geothermal climate change observatory has the capability of detecting a century scale energy perturbation that is one part in a million of the instantaneous flux.